It has been an eventful year in Iraq, with a surge of U.S. forces and sweeping changes in the security situation, but efforts at national political reconciliation have lagged behind. VOA Pentagon Correspondent Al Pessin reports on the year in Iraq.

A year ago, the co-chairman of the U.S. government's Iraq Study Group, Lee Hamilton, offered this stark assessment of spiraling violence in Iraq.

"The situation in Iraq is grave and deteriorating," Hamilton said.

His co-chair, former Secretary of State James Baker, summarized the group's call for change.

"It is time to find a new way forward, a new approach," Baker said.

President Bush acknowledged that his policies had not produced the results he wanted.

"2006 was a difficult year for our troops and the Iraqi people," Mr. Bush said.

The Iraq Study Group called for a reduction of U.S. troops in Iraq. But President Bush chose a different approach. In January, he announced an increase of 30,000 troops and a new strategy designed to improve security and give Iraqi politicians a chance to deal with key issues like oil revenue sharing and reintegrating Sunni Baathists into the government and the military.

"Overall it was a stunning military success, and I think exceeded the expectations even of those who believed in the idea from the start," said analyst Michael O'Hanlon of the Brookings Institution, who was a critic of the administration's Iraq policy for years and a skeptic of the new strategy's potential.

"We were losing the war for three-and-a-half years, and now we're at least building momentum, along with our Iraqi colleagues of course, in a way that seems to give us a decent chance. And that's a radical turnaround from where we were a year ago," he said.

According to the U.S. military, insurgent attacks in Iraq are down 60 percent from a year ago. Senior officials attribute the decline to the surge, to improvements in the Iraqi security forces, to a ceasefire by a key Shiite militia and to what is called 'The Awakening,' a decision by Sunni tribal sheikhs in Anbar Province to reject al-Qaida and cooperate with the coalition and the Iraqi government.

But the news was not all good. Increased fighting during surge operations made 2007 the deadliest year of the war for U.S. troops, with the casualty toll approaching 900. Most of the casualties were early in the year, and recent months have seen steadily declining casualty figures for U.S. troops, and for Iraqi troops and civilians, too.

Still, U.S. Defense Secretary Robert Gates, who took office a year ago after the departure of Donald Rumsfeld, says the turnaround is not yet complete.

"The progress is real, but it is also fragile," Gates noted. " The Iraqi government must use this breathing space bought with the blood of American, coalition and Iraqi troops to pass critical legislation."

Former Pentagon official Michele Flournoy, of the Center for a New American Security, says if the Iraqi political stalemate continues it will undermine the military progress.

"There's been success with damping down the violence and creating space," Flournoy said. "But whether that tactical success translates to strategic success will depend on whether anything comes of it politically. At the end of the day, if it doesn't translate into real political progress on the issues that will define the future of the country, it won't make a big difference."

U.S. officials agree that progress on national political issues is essential. But they also note that provincial and local governments are performing better than the national government, and that even without major revenue-sharing legislation passed Baghdad is providing more money to the provinces.

By the end of the year, one of the 20 U.S. military combat brigades in Iraq will be withdrawn, and by the end of July, four more will be out and will not be replaced, as long as the security situation does not deteriorate. Those are the surge troops that were sent earlier this year. In March, the commander of coalition forces in Iraq, General David Petraeus, is to make a recommendation on future U.S. troop levels.

Many analysts expect a continuing, but slower, U.S. withdrawal, perhaps with a relatively small contingent remaining in Iraq for several years to support Iraqi forces and help ensure stability. And they note that the coming U.S. presidential election will likely affect future U.S. policy toward Iraq.

But Michele Flournoy says the mission of U.S. troops in Iraq is already changing.

"The nature of the mission and the operations are starting to change," Flournoy said. "One transition that could and should happen over the next year is that U.S. forces would be doing less direct counterinsurgency operations, meaning less direct provision of security themselves, and would be doing more to back up Iraqi forces."

The story of Iraq was very different in 2007 from what it was the previous two years. Analysts agree that 2008 will be yet another crucial period for the country, one which could determine whether it achieves the 'sustainable stability' Iraqi leaders and President Bush want, accompanied by a further withdrawal of U.S. troops, or whether terror cells, ethnic rivalries and political stalemate combine to extend the fighting for another year, and perhaps beyond.